Kohl’s (KSS) Q4 2026 earnings summary

Executive summary

• Net sales declined 3.9% in Q4 and 4% for the year, with comparable sales down 2.8% in Q4 and 3.1% for the year, mainly due to lower store transactions and weather-related disruptions.

• Digital sales grew low single digits in Q4 and were flat for the year, with higher traffic offset by lower conversion.

• Inventory discipline and expense management led to adjusted diluted EPS of $1.07 in Q4, ahead of last year.

• Operating income improved to $212 million in Q4 and $624 million for the year.

• Proprietary brands and new initiatives, such as the By Kohl's campaign and impulse offerings, are central to the growth strategy.

Financial highlights

• Gross margin in Q4 expanded by 25 bps to 33.1% of sales; full-year gross margin up 34 bps to 37.5%.

• SG&A expenses decreased 4.9% in Q4 and 4.1% for the year; Q4 SG&A as a percentage of revenue was 28.3%.

• Adjusted net income in Q4 was $125 million, with adjusted diluted EPS of $1.07; full-year adjusted net income was $186 million, EPS $1.62.

• Operating cash flow was $750 million in Q4 and $1.4 billion for the year, up $700 million from 2024.

• Ended the year with $674 million in cash and no borrowings on the revolver.

Outlook and guidance

• 2026 net sales and comparable sales expected to be down 2% to flat versus 2025.

• Operating margin guidance: 2.8%-3.4%; EPS guidance: $1.00-$1.60.

• Other revenue expected to decline 4%-6% due to lower credit customer balances.

• Gross margin expected to be flat to slightly down; SG&A to decrease 0.5%-1.5%.

• Inventory to be down low- to mid-single digits; capex $350-$400 million.

• Q1 2026 comparable sales expected to be down low single digits.

• Quarterly dividend of $0.125 per share declared, payable April 1, 2026.